Elon Musk Cancels Twitter Purchase Agreement For This Reason
By: Divya Thearia
July 8, 2022 (New Delhi): Tesla company owner Elon Musk has announced to cancel the deal on his behalf to buy microblogging website Twitter for $ 44 billion. Elon Musk has made this announcement on Twitter, accusing him of hiding the exact number of his fake (Bot) accounts and not giving the full information sought about it. Twitter has said to challenge this decision of Musk in a legal way in court.
Musk on Friday alleged that the Twitter company had failed to give him sufficient information about the number of fake accounts, so he was withdrawing from his $44 billion deal. Twitter hit back at Musk’s statement, saying that the company would take legal action to enforce the deal with the Tesla CEO.
According to experts, Elon Musk also has the option of canceling the deal by paying a break-up fee of $ 1 billion. But it is clear from Twitter’s stand that the company is not ready for this and wants to force Musk to legally complete the deal. Twitter’s board has approved the deal with Elon Musk. The company’s CEO Parag Agarwal has also said that he wants to complete the deal.
A day before this i.e. on Thursday itself, Twitter had issued a clarification saying that it closes 1 million i.e. 10 lakh fake accounts every day. The company had also claimed that on a quarterly basis, the share of fake accounts in its active user base is much less than 5 percent. The company also said that its team examines random samples of thousands of accounts to identify spam or fake accounts. Things like IP address, phone number, location and account behavior are used to decide whether an account is true or fake.
On Friday, Twitter shares fell 5 percent to $36.81, while the price of a share was fixed at $54.20 in the deal with Elon Musk. On the other hand, shares of Musk’s company Tesla rose 2.5 percent to $ 752.29.
This famous deal between Elon Musk and Twitter seemed to be in trouble for the last several months. Elon Musk started raising the issue of fake accounts a few days after the deal was done. He was also repeatedly accusing the information given by Twitter about being insufficient. Due to this stance of his, the apprehensions of the deal being in jeopardy were constantly being expressed. Eventually these apprehensions turned out to be true.